The Implosion Of Inspections Within The Industry

How Three Dollar Inspections Determine Due Process

Ironically, the least paid service within the Mortgage Field Services Industry, is in effect the most vital. What I am referring to is the inspection process. For a foreclosure to even begin, an inspection is required. To ensure that routine tasks are being accomplished in an orderly and timely fashion, an inspection is required. And to receive payment for services rendered, an inspection is required. And yet these inspections ultimately pay Labor anywhere from three to fifteen dollars each. I want those numbers to sink in, for just a moment. For THREE DOLLARS, an American Citizen can lose the largest investments in their lifetime — their home. To put this more on point, the Declaration of Independence an American Citizen’s right to life, liberty, and the pursuit of happiness. And our judiciary enshrines the principle that none of the aforementioned may be removed from a person without due process of law. That principle is what we generally refer to as the Due Process Clause of the 14th Amendment to the Constitution. It reads as follows,

No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

And yet here we are. Three dollars represents the threshold of Due Process. With respect to the pricing, there is blame to go all around. The vast majority of inspection pricing is tied to what is commonly referred to as the Mortgagee Letter (ML). The ML was created by the US Department of Housing and Urban Development (HUD) to perform many tasks related to mortgages covered under FHA insured loans. The ML, additionally, sets the standard pricing for general tasks associated with property preservation including the inspections. And while the ML is not the only pricing format in use today — Fannie Mae, Freddie Mac, VA, USDA all have similar pricing sheets — it certainly is the most widely used in daily activities. Foreclosurepedia has the exclusive opportunity to discuss the ML with a Senior HUD Official whom had this to say,

The last update to the pricing was in ML 2016-02, which was issued on February 5, 2016, and is available here:  https://www.hud.gov/sites/documents/16-02ML.PDF.  Typically, it’s the NSC who initiates the request for ML updates, but truthfully it could come from anywhere within Single Family Housing.  Interestingly, in ML 2016-02, they dropped the cost of the inspection.  However, they broke out a separate reimbursement for photographs of up to $30.

Two things to note here: First, HUD pays $30 for the photos. Second, as opposed to prices increasing as almost everything does over the period of decades, the price of inspections actually DROPPED! And in both cases, Labor took it on the chin — Labor does not see a penny of the $30 for photographs and they took yet another cut on the inspection pricing. And by the time that the original twenty dollar inspection flows through the National Order Mill, whom takes half; it then flows through a Regional Order Mill whom takes half; and Labor is left with three to five dollars. Anyone whom believes that people are spending the proper amount of time determining if a residence is abandoned or not is full of shit. Everyone, in this game, loses other than the Order Mill.

The system has always been rigged against Labor, as a whole. And the Mortgage Field Services Industry is about a predatory as it gets. In less than a year alone, nearly ONE MILLION DOLLARS in fraud has been wrought upon Labor just within the inspections space.

So, how is it that with all of the compliance which the National Association of Mortgage Field Services (NAMFS) member demands, that fraud is king? Glad you asked. You see, NAMFS members have a  generally unspoken rule of Don’t Ask Don’t Tell. This means that NAMFS members know when they hire a firm and send them 10,000+ inspections, there is no way in hell that those are all being done in house. And provided that they get the results back up the pipeline, NAMFS members could give two shits whether or not Minority Females and Labor get fucked in the process. And if you believe that there is a single, solitary firm out there — even your own family member — whom is immune, you are full of shit as well. What I am driving at is that at the core of the Office of the Comptroller of Currency’s (OCC) as well as the Federal Reserve Board’s requirements, with respect to mortgage field services, lies the auditing process. And not a single firm I know of performs this. We published both documents below

Here is how it works: HUD – SFAM — insert any agency, financial institution, etc. — will drop a set of inspections to a Prime Vendor. That Prime will then send that list to a Regional Order Mill whom will, in turn, parse out batches to Labor. The Prime is paid whom, in turn, pays the Regional. The Regional then, is supposed to pay Labor. And while the Prime is audited for making payments, rarely, if ever, does that auditing extend down to verify Labor is ever paid.

To give you an example, kicking things off last year was the Primestar fiasco. When John Ryals, owner of Primestar Field Services, took the money and ran, the National Association of Mortgage Field Services (NAMFS) was put in a serious jam. Ryals, a flamboyant peacock whom bullied his way around NAMFS Annual conferences, hit rock bottom last August. Failed attempts to obtain bridge gap funding and inability to sell Primestar left him with only the inheritance his recently deceased mother left behind. And like Primestar itself, Ryals rapidly squandered that, as well. Millions of dollars are outstanding and even calls to Eric Miller by NAMFS members were turned away with that wink-and-a-nod Miller has perfected over the years.

And for anyone whom might argue that there are ANY redeemable qualities, with respect to NAMFS, look no further than the Twitter comments of the man selected to address women’s debt owed by — yeah, you guessed it — fellow NAMFS members. To date, the only solution which Miller and Justis Smith, then the NAMFS President and CEO of Rowe Enterprises have been able to put forward is a poster child for the #MeToo movement. Let’s take a look at Brett Rockwell, for just a moment. Brett Rockwell is the point man personally selected by Eric Miller and Justis Smith to partner with NAMFS and assist women — and other NAMFS and non NAMFS members — in their collections efforts. I have always believed that our social media profiles best represent what we believe. In the case of Brett Rockwell’s Twitter feed, it is pretty clear that his respect for women is challenged by his crude comments about them.

There wasn’t a single National Order Mill not impacted by the fraud perpetrated by Primestar. And while firms like Guardian Asset Management, Twenty One Hill, and the former M&M Mortgage stepped up to make things right, the rest of the NAMFS Rat Pack said fuck ’em.

RSB Field Services — also functioning as Ball Field Services — figured they would do one better. And it really shouldn’t come as any surprise. RSB Field Services was on our radar going all the way back to 2014. The excuses ranged the spectrum for why Randy Balamut could not pay Labor — funerals, bank hijacking, stolen identity — I mean it sounded like a Monty Python script. One contractor alone is owed over SEVENTY THOUSAND DOLLARS! And unlike most of Labor out there, they took their matter to the Arizona Attorney General. They are encouraging other victims to do the same and the contact info is below.

An interesting byline to this is that Labor, in many cases, is just as fucked up as Management. Out of the 99.9% of cases I have handled in recovering well over One Million Dollars for victims, I have received two thank you’s and $39. In almost all of the cases Labor was not a member of the International Association of Field Service Technicians (IAFST).

Where does it all end? Well, it will never end until Labor begins to refuse to accept low paying, three dollar inspections. It will never end unless Labor chooses unite under one banner. And it will never end unless An Injury To One Is An Injury To All!

The OCC’s Guidance

The Federal Reserve’s Guidance

 

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